CANADA FX DEBT-C$ firms slightly after positive Canadian data

Reuters Staff

3 Min Read

* Canadian dollar at C$1.0875 or 91.95 U.S. cents
* Bond prices higher across the maturity curve
By Leah Schnurr
TORONTO, May 15 (Reuters) - The Canadian dollar firmed
modestly against the greenback on Thursday after data showed
domestic manufacturing sales rose in March for the third month
in a row.
Still, the gains saw the currency stick to its recent
trading range and analysts think it is likely to remain trading
around either side of C$1.10 in the near-term.
Manufacturing sales rose by 0.4 percent, better than the 0.3
percent rise economists had been expecting.
But the benefit to the loonie was mitigated by several
economic reports out of the United States that also showed
improvement, which counterbalanced the impact on the U.S.
dollar-Canadian dollar pairing, said Greg Moore, senior currency
strategist at Royal Bank of Canada in Toronto.
"The broader view on U.S. dollar-Canadian dollar is really
still that we're tracing out this wide neutral range for the
time being," said Moore.
"Before there's a stronger divergence in data trends between
the U.S. and Canada, it's going to be a bit of a sideways move
for the currency."
The Canadian dollar was at C$1.0875 to the
greenback, or 91.95 U.S. cents, slightly stronger than
Wednesday's close of C$1.0882, or 91.89 U.S. cents.
The Canadian dollar has seen a bigger divergence against
some of its other crosses, including the euro and sterling,
which could see some stronger trends emerge, said Moore.
The euro fell against the Canadian dollar after data showed
the euro zone economy grew much less than expected in the first
quarter. The euro was at C$1.5082.
"This slightly stronger-than-expected (Canadian) data today
and generally over the last few months, balanced against some
not quite as strong data in regions like Europe and the UK
suggests both of those crosses could favor the Canadian dollar
in the coming weeks," Moore said.
Canadian government bond prices were higher across the
maturity curve, with the two-year up 1.3 Canadian
cents to yield 1.039 percent and the benchmark 10-year
was up 30 Canadian cents to yield 2.257 percent.